Correlation Between Payden High and Western Asset
Can any of the company-specific risk be diversified away by investing in both Payden High and Western Asset at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Payden High and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden High Income and Western Asset High, you can compare the effects of market volatilities on Payden High and Western Asset and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Payden High with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden High and Western Asset.
Diversification Opportunities for Payden High and Western Asset
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Payden and Western is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Payden High Income and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Payden High is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Payden High Income are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Payden High i.e., Payden High and Western Asset go up and down completely randomly.
Pair Corralation between Payden High and Western Asset
Assuming the 90 days horizon Payden High Income is expected to generate 0.66 times more return on investment than Western Asset. However, Payden High Income is 1.51 times less risky than Western Asset. It trades about 0.22 of its potential returns per unit of risk. Western Asset High is currently generating about 0.14 per unit of risk. If you would invest 561.00 in Payden High Income on December 8, 2024 and sell it today you would earn a total of 76.00 from holding Payden High Income or generate 13.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 63.97% |
Values | Daily Returns |
Payden High Income vs. Western Asset High
Performance |
Timeline |
Payden High Income |
Western Asset High |
Payden High and Western Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Payden High and Western Asset
The main advantage of trading using opposite Payden High and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden High position performs unexpectedly, Western Asset can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Western Asset will offset losses from the drop in Western Asset's long position.Payden High vs. Investec Global Franchise | Payden High vs. Dreyfusstandish Global Fixed | Payden High vs. Ab Global Real | Payden High vs. Aqr Global Macro |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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